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Tech, growth stocks lead Wall Street to lower close as investors focus on interest rates

Stock Markets Mar 14, 2022 08:41PM ET
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2/2 © Reuters. FILE PHOTO: Flags are seen outside the New York Stock Exchange (NYSE) in New York City, where markets roiled after Russia continues to attack Ukraine, in New York, U.S., February 24, 2022. REUTERS/Caitlin Ochs 2/2

By Caroline Valetkevitch

NEW YORK (Reuters) - Major U.S. stock indexes closed mostly lower on Monday, led by a more than 2% drop in Nasdaq, as investors sold tech and big growth names ahead of this week's Federal Reserve meeting and an expected hike in interest rates.

The Dow ended flat, with financial and healthcare shares giving the index some support.

Developments in the Ukraine-Russia conflict added to investor caution as Russian and Ukrainian delegations held a fourth round of talks on Monday, but no progress was announced, while Russian forces allowed a first convoy of cars to escape Ukraine's besieged port of Mariupol.

Apple Inc (NASDAQ:AAPL) shares fell 2.7% and weighed the most on the S&P 500 and Nasdaq after its supplier Hon Hai Precision Industry Co Ltd, known as Foxconn, suspended operations in China's Shenzhen amid rising COVID-19 cases.

The Fed is expected to raise interest rates for the first time in three years Wednesday in an effort to combat rising inflation.

"We're seeing that rotation into value and away from growth, and a lot of that is tied to what's happening to interest rates," said Paul Nolte, portfolio manager at Kingsview Investment Management in Chicago.

"Equity markets are going to be challenged going forward, and today is yet another example of that."

The technology sector and consumer discretionary were the biggest drags on the S&P 500. Higher interest rates are a negative for tech and growth stocks because their valuations rely more heavily on future cash flows.

The Dow Jones Industrial Average rose 1.05 points to 32,945.24, the S&P 500 lost 31.2 points, or 0.74%, to 4,173.11 and the Nasdaq Composite dropped 262.59 points, or 2.04%, to 12,581.22.

The Russell 2000 index of small capitalization stocks fell 1.9% and was down more than 20% from its November record closing high. The Cboe volatility index, also known as Wall Street's fear gauge, rose.

The S&P financial index rose 1.3% as U.S. Treasury yields jumped to 2-1/2-year highs. The healthcare sector advanced 0.7%, with UnitedHealth Group (NYSE:UNH) up 1%.

Energy slid 2.9%, as Brent crude fell below $110 a barrel, a week after it rose as high as $139 due to the Ukraine crisis.

Oil and other commodity prices have shot up following tough Western sanctions against Russia.

Declining issues outnumbered advancing ones on the NYSE by a 3.05-to-1 ratio; on Nasdaq, a 2.97-to-1 ratio favored decliners.

The S&P 500 posted 11 new 52-week highs and 32 new lows; the Nasdaq Composite recorded 26 new highs and 615 new lows.

Volume on U.S. exchanges was 14.26 billion shares, compared with the 13.7 billion average for the full session over the last 20 trading days.

Tech, growth stocks lead Wall Street to lower close as investors focus on interest rates
 

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Comments (33)
Nils Hullmann
Nils Hullmann Mar 15, 2022 5:02AM ET
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COVID is back. china enjoys the show. you want your supply chains back ? how about no I did will be rank 4 GDP and China rank 1
Kochar Bipin
Kochar Bipin Mar 15, 2022 2:23AM ET
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With China facing a major Covid outbreak and Q1 growth well behind 5.5% targer, supply chain will get further stretched - Fed must factor this in
Steve Miller
Steve Miller Mar 14, 2022 10:18PM ET
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anyone who tries to buy the dip in this market will get killed. this is a bear Market and we're headed for stagflation. do not buy into this downmarket
Maximus Maximus
Maximus Maximus Mar 14, 2022 7:59PM ET
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trump and republicans worship of putin, and their treasonous storming of the capitol, emboldened putler to go to war, causing the mess we're now in. Nobody in their right mind will ever vote republican again
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Steve Miller
Steve Miller Mar 14, 2022 7:59PM ET
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Putin was afraid of Trump and that's why he waited until a week need Biden became president period period Biden left are Americans in Afghanistan
Zack Smith
Zack Smith Mar 14, 2022 7:59PM ET
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Trump directly threatened Russia when they threatened to shoot down missiles fired at Syria. Putin was afraid of that Trump would actually hold him accountable and not be asleep on the job like sleepy Joe. Thankfully we know history and don't need to believe your make believe narrative.
Robert Adkison
Robert Adkison Mar 14, 2022 7:59PM ET
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Whats sad is this guy belives what he said!
Maximus Maximus
Maximus Maximus Mar 14, 2022 7:59PM ET
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zack steve What nonsense you speak. trump is putlers biggest cheerleader, even hailing him as a genius for invading Ukraine
Helen Anceriz
Helen Anceriz Mar 14, 2022 7:59PM ET
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sleepybot
Nils Hullmann
Nils Hullmann Mar 14, 2022 3:43PM ET
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no more dems in charge after midterms...once your 401k evaporates fun is over
Stephen Ford
Stephen Ford Mar 14, 2022 3:30PM ET
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The market has too many stupid retail investors that can't afford to invest.
Ac Tektrader
Ac Tektrader Mar 14, 2022 3:08PM ET
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this is all about the love for *****control and fear of free societies by Russia.......the answer by Russia is genocidal war.
First Last
First Last Mar 14, 2022 3:08PM ET
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Russia was allied w/ the genocidal Na zi
Gary Moses
Gary Moses Mar 14, 2022 2:56PM ET
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That Dow rise didnt last long. Its now negative, as well as the SP 500.
Kash Singh
Kash Singh Mar 14, 2022 2:23PM ET
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Liar Reuters... Presenting lies to rid retail traders of their hard earned money...
Kash Singh
Kash Singh Mar 14, 2022 2:23PM ET
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Liar Reuters... Presenting lies to rid retail traders of their hard earned money...
Stephen Ford
Stephen Ford Mar 14, 2022 2:23PM ET
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f. u. c. c. them they are stupid and cause prices to fall because of stupid fears
 
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